Social media means different things to different people.  It may mean following your favourite celebrity on Twitter; or keeping up with friends in the UK on Facebook or Google+ or colleagues on LinkedIn.  For many of us, it plays a crucial role in our lives and how we communicate with each other.

It's not surprising that social media is now a powerful tool for marketers. It enables products, brands and organisations to have conversations and interactions with customers - in real time.  This personal interaction can instill a feeling of loyalty in followers and potential customers and can result in marketing messages reaching key (and sometimes narrow) target audiences.  But, for all the benefits of social media, potentially serious legal issues can arise when it comes to advertising.  Companies and organisations (both the marketing and legal teams) need to be aware of these issues as part of their marketing and social media strategies.

New Zealand's Advertising Standards Authority (the "ASA") has recognised the potential risks of social media when it comes to advertising.  This is a welcome recognition given the interesting decisions and statements that have recently been issued by regulators in Australia.  By issuing its Guidance Note on Social Media and the resulting publicity last week, the ASA has highlighted the potential risks to companies and organisations in New Zealand from social media advertising.

Australia: to delete or not to delete?

It's worth considering what has been happening across the Tasman before reviewing the ASA's Guidance Note.

The Australian Competition and Consumer Commission ("ACCC"), as noted by the ASA, has stated that it views any false or misleading comments on a company's or organisation's social media page, including Facebook, as part of its marketing communications, regardless of whether it is consumer-generated or brand-generated.

This is consistent with some recent decisions by the Australian Advertising Standards Bureau ("AASB"), where a company's Facebook site was found to be a marketing communication tool over which the advertiser has a reasonable degree of control, and which could be used to draw the attention of the public in a manner calculated to promote a product or service (whether directly or indirectly).  

Of more concern for businesses was the AASB's decision in relation to the Facebook pages for VB and Smirnoff.  In decision 0271/12 (made in July this year), the AASB found that the advertisers were responsible for comments posted on brands' Facebook pages by members of the community, ie consumer-generated comments.  The AASB's reasoning was that the Facebook pages were used to engage with customers and its Advertising Codes therefore apply to any content generated by the page creator as well as material or comments identified by users or "friends".  Interestingly, the objectionable comments (most of which are too colourful for us to include in this update) were made in response to questions posed by the brand owners.

The AASB further noted that social media is an advertising platform that requires monitoring to ensure that offensive material is removed within a reasonable timeframe and that content within a Facebook page should, like all other advertisement and marketing communication, be assessed with the Advertising Codes in mind.  The AASB recognised the challenges in effectively monitoring social media to ensure that offensive material is removed within a reasonable time, but upheld the complaint anyway - some comments referenced in the complaint were posted on the Facebook page in early 2011.

The ACCC's and AASB's position is consistent with the position adopted by the Australian Federal Court.  In ACCC v Allergy Pathway Pty Ltd,1 it was held that the defendant, a health company, was responsible for consumer created content on its social media pages, where it knew of them and made a decision not to remove them.

The ASA's Guidance Note on Social Media

For the purposes of the ASA's Advertising Codes of Practice, the word “advertisement” is to be taken in its broadest sense to embrace any form of advertising, and includes advertising which promotes the interest of any person, product or service, imparts information, educates, or advocates an idea, belief, political viewpoint or opportunity.

The ASA's Guidance Note on Social Media identifies that consumer-generated content can fall within the jurisdiction of the ASA's Advertising Codes of Practice.  The ASA will approach each complaint on a case by case basis, including where advertising and consumer-generated content exist side by side.  Context will be key.  The ASA will consider the following matters:

  • Whether the advertiser originally solicited the submission from individuals and then adopted it and incorporated it within their own advertising?
  • Or alternatively, did an individual provide the advertiser, on an unsolicited basis, with material that the advertiser subsequently adopted and incorporated within their own advertising?
  • Did the advertiser solicit the consumer generated content (eg via an invitation to enter a competition) that resulted in content being posted on the site?

If the answer to any of these questions is "yes", and if the content of the material and the form it is used constitute an advertisement, then the consumer-generated content will be regarded as advertising.

There has also been consumer backlash in various jurisdictions when consumers have found out that celebrities or other tweeters have been paid for their tweets, including when endorsing products.  In recognising this, when using paid-for Twitter endorsements, the ASA requires the hashtag "#ad" to be included.  Advertisers also need to be careful when re-tweeting customer tweets, as they could be liable for that content if misleading.

Things that are likely to be outside the ASA's jurisdiction include individuals posting footage (including companies' TVCs) on YouTube, and posts or tweets from a company or organisation that are re-posted or re-tweeted with additional content or footage.

Things to consider

Each company and organisation will need to consider whether to use social media and, if so, how to use it.  One of the key challenges from a marketing perspective will be striking the balance between real time engagement with consumers and giving them an opportunity to have their say (even if the comments are negative towards the brand - so that the page is "authentic") and deleting posts that may make the advertiser liable, including for misleading, offensive or defamatory comments.  

It's unlikely any lawyer will ever be in charge of a company's Facebook page (although some in-house counsel may disagree!), but the person responsible for social media will need to be aware of the legal risks.  Companies and organisations will need to carefully consider their use of social media, their social media policy (if any exists), training for staff, pre/post-moderation and whether the use of disclaimers is appropriate. And that's even before considering other legal issues arising in the intellectual property and employment contexts.

Whether your organisation has embraced it or not, social media will be with us for the foreseeable future.  The possibilities it provides from a marketing perspective are significant and exciting - the test will be balancing these possibilities against the potential minefield of legal risks.